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Independent watchdog urges government to ‘come clean’ over deals

Covid19

The government was not transparent about suppliers and services when it scrambled to award £18bn worth of Covid-19 contracts, the public spending watchdog has said.

The National Audit Office (NAO) found firms recommended by MPs, peers and ministers’ offices were given priority.

It said there was inadequate explanation of key decisions, such as why particular suppliers were chosen.

Nor was enough done to address potential conflicts of interest.

Meg Hillier, chairwoman of the Commons Public Accounts Committee, called for ministers to “come clean” and publish all information about the contracts awarded.

The government acknowledged it had procured services with “extreme urgency” due the crisis but it said it had “robust processes in place”.

According to the NAO’s report, more than 8,600 coronavirus contracts had been awarded by 31 July, ranging in value from less than £100 to £410m.

Of these, £10.5bn-worth were awarded directly without a competitive tender process, the report said.

Personal protective equipment (PPE) accounted for 80% of the number of contracts awarded.

The report comes after the BBC revealed on Tuesday that a Spanish businessman who acted as a go-between to secure protective garments for NHS staff in the pandemic was paid $28m (£21m) in UK taxpayer cash.

The consultant, Michael Saiger, had been in line for a further $20m of UK public funds, documents filed in a US court reveal.

The legal papers revealed the American supplier of the PPE called the deals “lucrative”.

‘Tip of the iceberg’

NAO head Gareth Davies said it remained “essential that decisions are properly documented and made transparent if government is to maintain public trust”.

Ms Hillier, a Labour MP, said the failings uncovered may be the “tip of the iceberg”.

“The government overlooked a serious conflict of interest, paid consultants for months before giving them contracts and purchased masks it knew weren’t up to scratch.

“It’s bad enough that it set up a ‘high-priority lane’ to fast-track companies with the right connections.

“But the failure to track how half the companies had ended up on it made it impossible to ensure proper safeguards were in place.”

Declared interests

The NAO looked in detail at 20 contracts including:

  • A deal with research firm Public First, whose owners had “previously advised or worked with” Cabinet minister Michael Gove.
  • Artificial intelligence company Faculty, which was awarded contracts worth almost £3m. Cabinet Office minister Lord Agnew owned a £90,000 stake in the firm but has since relinquished it.
  • Ayanda Capital supplied 50 million masks that could not be used for their original purpose at a cost of £155m. The deal was brokered by a businessman who was an adviser to the government’s Board of Trade at the time.
  • PestFix, a pest control company, was given contracts worth £350m, which included delivery of 600,000 masks which cannot be used for their original purpose.
  • The NAO concluded that in cases of potential conflicts of interest involving ministers, all had properly declared their interests and it found “no evidence of their involvement in procurement decisions or contract management”.

The spending watchdog acknowledged the pandemic required acting with “extreme urgency” and the Public Contracts Regulations allowed an emergency response, including awarding deals directly without a formal competition.

Cabinet Office Minister Julia Lopez said: “We have been dealing with an unprecedented global pandemic that has posed the biggest challenge to the UK in a generation.

“As this report rightly recognises, we needed to procure contracts with extreme urgency to secure the vital supplies required to protect frontline NHS workers and the public and we make no apology for that.

“We have robust processes in place for spending public money to ensure we get critical equipment to where it needs to go as quickly as possible, whilst also ensuring value for money for the taxpayer.

“It is important to maintain the public’s confidence in how we manage their money, and we welcome the NAO’s scrutiny of our processes and recommendations on how they can be improved.”

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Independent watchdog urges government to ‘come clean’ over deals

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